The digital payments segment is undergoing massive growth cycle due to the critical role played by the centre as well as the regulators. Next year, we are working to enable digital payments for over 25 million small merchants across 5,500 talukas with a focus on the rural and semi-urban areas of the country. On the plans for going public, PhonePe has a line of sight to becoming profitable by 2022 and plans to file for an IPO in 2023, says Hemant Gala, VP Financial Services & Payments, PhonePe, in conversation with Elets News Network (ENN).
1. What are your expansion plans for India? Are you planning to go public by 2023 as a separate entity in the US or India?
Going forward, at an organization level, our focus will be on growing the user base to 500 million from 230 million currently, launching more products in the Financial Services space (currently we have Mutual Funds & Insurance products), growing the offline merchant network to tier 3, 4 cities & beyond and partnering with more brands on our Switch platform (currently has 210 partner apps). In the next year, we are working to enable digital payments for over 25 million small merchants across 5,500 talukas with a focus on the rural and semi-urban areas of the country. On the plans for going public, PhonePe has a line of sight to becoming profitable by 2022 and plans to file for an IPO in 2023. It is a bit too early to comment on the specifics.
2. How is PhonePe dealing with the changing regulations pertaining to the digital payments domain in India?
The digital payments segment is going through a massive growth cycle and the government and the regulators have played a very critical role in enabling the growth. Regulations have played an enabling role for all stakeholders and we continue to adapt to any new changes.
3. Reportedly, PhonePe has added six new products in the insurance and wealth management space, lately. What new and exciting are you planning in the insuretech segment?
Building a comprehensive suite of financial services products for our users is a key focus area for us this year. We continually focus on building customer-centric products backed by deep research on customer needs and simplified purchase flows. In the last 4 months alone, we have added 6 new products in the insurance and wealth management space. We have become the fastest-growing insure-tech distributor in the country today. Before the end of this year, we intend to launch multiple tailor-made products across Insurance and Mutual Funds addressing key use cases and solving critical customer problems.
4. PhonePe has over 230 million registered users. How has the COVID outbreak changed your approach towards your customers and merchants? How is PhonePe helping them?
We have seen significant growth throughout the COVID period. During COVID, our new user acquisition numbers increased by 50% and it is heartening to see digital payments being adopted by users across age groups, income levels, and locations. Our transaction volume for July was at 620 million transactions that surpassed the February 2020 levels (pre-lockdown). We have surpassed pre-COVID volume in most of our categories which is a great signal. We have launched a series of products in the mutual funds and insurance verticals and also innovated on behalf of our merchants. Here are the details of the products launched over the past few months.
We have launched a series of products in the mutual funds and insurance verticals and also innovated on behalf of our merchants. Here are the details of the products launched over the past few months.
❖ Personal Accident Cover: Launched in July. Offers the customer or its nominee a fixed, lumpsum amount in the unfortunate event of death or total permanent disability of the insured due to an accident. The premium for the same starts from INR. 24 to INR 480 with the sum insured ranging from INR 1 lakh to INR 20 lakhs.
❖Dengue & Malaria cover: Launched in July. Offers policyholders a fixed cash payout amount on diagnosis and more than 48 hours of hospitalization due to 6 vector-borne diseases including Dengue, Malaria, Japanese Encephalitis, Kala-Azar, chikungunya and filariasis.
❖Hospital Daily Cash: Launched in July. Offers a per day cash payout for up to 15 days on hospitalization with a minimum 48 hours of hospitalization payable from the second day onwards. The premiums start from INR 130 and the Sum insured available amount goes up to INR 75,000
❖ CoronaVirus Insurance Policy: Launched in April. Offers a cashless and reimbursement payout for diagnosis and hospitalization due to Covid-19 up to INR 1 lac with prices starting from INR 396
❖Domestic Travel Insurance: Launched in June. Offers an affordable annual insurance cover of up to INR 5 lakhs for a number of travel-related untoward incidents for INR 499
❖Super Funds: Launched in May. A comprehensive investment solution managed by professional Fund Managers that invests across multiple top equity, gold and debt funds of different mutual fund companies to help investors create long-term wealth in a safer way. Investors can begin investing with as little as INR 500 per month.
To enable the hyperlocal discovery of kirana stores and also help customers during COVID, we introduced features like “currently operational” and “home delivery” on the PhonePe app. We also introduced the “Pay Now” feature on the Stores page which enables customers to make remote payments and we also have contactless payments enabled through QR at all our merchants.
5. How are you handling the cybersecurity threats and planning the budget for it in times when digital is the new normal?
We have been investing continually in developing in-house solutions to deal with various aspects of cybersecurity. These systems and rule engines work round-the-clock to flag abnormal signals in real-time. The PhonePe app is secured via two-factor authentication (2FA) which rules out the unauthorized usage of the app. Users need additional verifications when they login to the app from new devices. We sensitize users about keeping their digital footprint safe from scammers through various channels such as in-app notifications, emails and blogs. We also keep a very close eye on the user behaviour, devices and instruments they are using, locations, IP etc. We automatically block transactions with suspicious attributes and periodically remove users with repeated signals of bad behaviour.